Libyan Arab Jamahiriya v Actimon SA

CourtFederal Tribunal (Switzerland)
Switzerland, Federal Tribunal.
Libyan Arab Socialist People's Jamahiriya
Actimon SA

State immunity Attachment and execution Foreign central bank funds Whether immune from attachment Whether funds held for non-commercial purpose Requirement to establish specific allocation of funds for sovereign purposes European Convention on State Immunity, 1972, Article 23 Divergence from existing rules of customary international law Whether Convention rules applicable to non-parties

State immunity Jurisdictional immunity Commercial activity Agreement for construction of milk pasteurization plant Whether State party entitled to immunity in action for breach of contract Whether nature or purpose of act decisive Requirement of close connection between dispute and forum State

Sources of international law Treaties European Convention on State Immunity, 1972 Whether declaratory of existing rules of customary international law Whether applicable to States not party to Convention The law of Switzerland

Summary: The facts:In 1980 Actimon SA, a company with its seat in Geneva, agreed to supply to Libya a complete milk pasteurization plant. A dispute arose concerning the performance of the contract and Actimon sought and obtained the attachment of Libyan bank balances held in Switzerland. Initially the attachment did not extend to property held in the name of the Libyan Central Bank but, on appeal to the Superior Court of Zurich, the attachment was extended to cover property held in the name of the Central Bank. The Libyan State lodged a public law appeal, claiming that its immunity had been violated.

Held:The appeal was dismissed.

(1) In the absence of any treaty concerning State immunity to which both Switzerland and Libya were parties, the rules of public international law governed the legality of the attachment. These rules limited State immunity to acts performed jure imperii as opposed to acts performed jure gestionis, where the foreign State in question had acted as an ordinary private individual.

(2) The fact that Switzerland had adhered to the European Convention on State Immunity, 1972, did not require the modification of Swiss jurisprudence in relations with States which were not parties to the Convention. The Convention diverged significantly from current Swiss jurisprudence in that no measures of execution against the property of a contracting State could be taken unless the State concerned gave its written consent in the particular case (Article 23). But the Convention established a unified system which could only reasonably be applied as a coherent whole. The application of isolated provisions of the Convention to relations between States which were not parties to it was therefore not justified.

(3) In order to distinguish between acts performed jure imperii and jure gestionis, it was necessary to examine the nature of the legal relationship at issue rather than the purpose of the act. A distinction had to be drawn between an act which was characteristic of the exercise of public power and a relationship where the State acted on an equal footing with an ordinary private individual. The ordering and installation of a milk pasteurization plant undoubtedly constituted acts which could equally well be performed by legal persons governed by private law and were therefore acts performed jure gestionis. A sufficiently close connection with Switzerland was established because the debt was enforceable there.

(4) Where the property of a foreign State was allocated for the performance of sovereign functions, execution was inadmissible. Not all property of foreign States and their central banks was automatically allocated for the performance of sovereign functions. In addition to administrative assets the State also normally owned private financial assets, which were comparable to property owned by natural or legal persons under private law. Immunity could only be claimed where the assets at issue were allocated in an identifiable manner for the performance of sovereign functions, as in the case of those services necessary for the maintenance of diplomatic relations. The view that foreign central bank...

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